A syndicate of co-ownership becomes an employer when it hires an employee under a work contract, whether verbal or written. A work contract exists when an employee performs work for remuneration under the direction or control of an employer (article 2085 of the Civil code of Quebec). This entails new legal responsibilities and obligations for the syndicate of co-ownership (SOC). Failure to comply with these obligations can result in significant legal and financial consequences. To ensure compliant and effective management of this new employment relationship, it is important to follow these step
1. Registration as an Employer with Tax Authorities:
Revenu Québec: An SOC must register as an employer with Revenu Québec. This registration allows for the withholding of Quebec income tax at source, as well as the collection and remittance of employee contributions to the Quebec Pension Plan (QPP) and Quebec social programs, such as the Quebec Parental Insurance Plan (QPIP), if the employment is insurable.
Canada Revenue Agency (CRA): The SOC must also register with the CRA to obtain a payroll deductions account number, which includes federal income tax and employment insurance (EI), if the employment is insurable.
2. Enrollment with the CNESST:
The SOC must also register with the Commission des normes, de l'équité, de la santé et de la sécurité du travail (CNESST) to insure its employees against work accidents and occupational diseases.
3. Payroll preparation:
Implement a payroll system that complies with tax laws and labor standards. This includes withholding taxes and social contributions, as well as paying wages. An SDC must also keep payroll and deduction records for at least 6 years from the end of the tax year to which they apply.
4. Drafting and posting policies against psychological harassment and on health and safety at work:
Develop policies against psychological harassment and on health and safety at work and ensure that employees understand them. These policies must be visibly posted in the workplace.
5. Training and information:
Ensure that all employees, including remunerated co-owners, receive adequate training on health and safety standards at work.
An employer who fails to comply with payroll deduction requirements may have to pay a penalty for amounts not withheld. Additionally:
In case of an accident:
Financial Responsibility: If an accident occurs and the SDC is not registered with the CNESST, it could be held responsible for all costs associated with the accident, including medical care and employee compensation. Criminal Liability: Penalties may be imposed on the SDC for non-compliance with legal safety obligations.
For directors:
Civil liability: Directors could also be held personally liable if their negligence or omission leads to a work accident, in civil lawsuits for damages.
Criminal liability: In very serious cases, administrators may also face criminal charges if their behavior is deemed reckless or deliberately negligent.
Compliance tips:
Consultation with a lawyer or labor law expert: Obtain legal advice to ensure that all procedures are correctly followed and comply with current laws. Use of Payroll Management Software: Use specialized software for payroll and social contributions management to avoid errors.
Continuous training: Provide ongoing training for administrators and employees on new standards and best practices in health and safety at work.
Occasional volunteer work: If work is occasionally performed by volunteers, including co-owners, consider registering them with the CNESST, depending on the circumstances, so they too can benefit from the advantages provided by the Occupational Health and Safety Act.
Conclusion:
To protect the SOC and its directors, it is essential to comply with all legal obligations regarding employment and workplace safety. This includes registration with tax authorities and the CNESST, implementing a compliant payroll system, and continuous training for employees and administrators. In the event of an accident, the financial and legal consequences can be severe, making compliance indispensable.
Richard LeCouffe
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